PwC’s Africa CEO Survey shows growth, agility and change among top companies in East Africa

13 January 2014

CEOs in Africa are confident of growth prospects, specifically growth related to new products and services, and focused on targeted efforts to reach more customers and clients on the continent. These are some of the main findings of PwC’s recent Africa CEO Survey. The full results are published in PwC’s annual Africa Business Agenda publication (www.pwc.com/theagenda).

The survey shows that CEOs in Africa are optimistic about the prospects for revenue growth over the next 12 months. CEOs in Ghana (94%), South Africa (90%), Zimbabwe (90%) and Rwanda (87%), show the highest level of optimism. CEOs in Kenya (83%), Tanzania (70%), Uganda (67%) and Zambia (65%) are ‘somewhat or very’ confident of growth.

Senior Partner for the East Anne Eriksson, Regional Market Region in Africa said: 'What we have found in The Africa Business Agenda is that agility in response to change, challenge and opportunity is the deciding factor between companies that thrive in Africa and those that are merely doing business.'

The Africa Business Agenda compiles survey results from 301 CEOs in Africa and includes insights from business and public sector business leaders from 22 countries, including Kenya, Uganda, Tanzania, Rwanda and Zambia in eastern Africa. The publication shows that most CEOs in Africa feel confident about their approach to managing risk, despite some volatility and uncertainty.

To manage change and grow their companies, CEOs in Africa say that they need to the right people, according to PwC’s survey. Talent management strategies are helping them to recruit the best and the brightest—from their home markets, the Diaspora and specifically from within Africa.

The agility agenda

Anne Eriksson continued: 'Confidence is very strong among Africa's CEOs and CEOs in East Africa. Confidence is inspired by growth potential across every industry sector. There is a great deal of variation among companies that wish to harness this potential. In Africa and beyond, agility is the main underlying factor allowing companies to realise their full potential.'

Agility is being implemented through specific strategy changes, according to PwC’s survey. Most CEOs anticipate some change to their company’s strategy within the next 12 months. Growing the customer base, enhancing customer service and implementing new technologies are considered the top three investment priorities over the next 12 months, all contributing to companies’ abilities to respond to change and leverage opportunities.

"We are seeing more use of technological innovation to address the many challenges and opportunities faced in Africa. Technology enables agility and growth and helps companies to manage and address risks and impacts talent development and retention," said Eriksson.

The growth agenda

CEOs are focused on customers and operational effectiveness to grow their companies. The majority of CEOs in Africa (85%) expect their operations in Africa to grow this year, compared to 74% of their global counterparts. In East Africa, 92% of CEOs in Africa expect some change to their customer growth, retention and/or loyalty strategies this year, compared to 82% of CEOs globally.

While many CEOs are focused on reaching new customers and securing relationships, a number are also concerned about the effect new market entrants may have on their businesses. This is particularly pronounced among CEOs in Uganda (65%), compared to the average of 48% CEOs in East Africa who say that new market entrants are a potential threat.

'Companies must now do more to serve their clients better,' said Peter Ngahu, an assurance partner with PwC Kenya who has worked extensively throughout East Africa. 'The more collaboratively they work as a business, the more value they deliver. Customers and clients want deeper insights and more intuitive products and services. Providing a distinctive experience is the heart and soul of competitive advantage. That's why enhancing customer service is a top-tier investment priority for companies in East Africa this year, and it's why we're seeing so much investment in offices and infrastructure to support this level of service.'

The CEO Survey also identifies a number of risks to growth, including an increasing tax burden and over-regulation.

Eighty-three percent of CEOs in PwC's survey say that an increasing tax burden is a threat to growth, while 58% anticipate some change to their approach to tax planning and contribution this year. Seventy-five percent say that over-regulation is a threat to growth, but over a third believe that the government where they are based is driving the convergence of global tax and regulatory frameworks.

'Tax planning influences corporate reputation and can help to build trust among stakeholders,' said Steve Okello, a tax partner with PwC Kenya with experience in East and West Africa. 'But the larger issue is that ambiguity and uncertainty regarding the tax and regulatory environment hurts growth prospects.'

The leadership agenda

CEOs remain concerned as ever about the availability of key skills. PwC's survey shows that nowhere is the shortage of skills more acute than in fast-growing regions like Africa, where creating and fostering a skilled workforce is a priority for 84% of CEOs.

The retention of talent is an important issue across all countries surveyed. Three-quarters of CEOs in Africa reported that they are using traditional strategies to develop the leadership pipeline such as active succession planning and executive development programmes. CEOs in Kenya (97%), Tanzania (90%) and Uganda (100%) were almost unanimous in their conviction that matching pay was an essential strategy to avoid losing top talent to the competition.

'We know from our own experience and working with many of our clients that talent recruitment and retention are priorities on the executive agenda in Kenya and East Africa,' said Kuria Muchiru, a partner with PwC Kenya's consulting practice and the Human Capital Leader for the PwC Africa territory. ‘Employers want to inspire pride and loyalty, among their employees. This comes down to more than just pay and promotions, however.

'Challenging career opportunities, contributing to strategic decision making, technology and flexible working hours also improve retention. At the end of the day, talented people want to work in world-class facilities among the best and the brightest.'

Notes to the editor

About the Africa Business Agenda The Africa Business Agenda is based on a survey of 301 CEOs in Angola, Botswana, Cameroon, Congo-Brazzaville, Côte d’Ivoire, DRC, Gabon, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe. Additional insights were compiled from in-depth interviews in Algeria, Morocco and Mauritius. The survey and in-depth interviews were conducted from November 2012 – June 2013. The survey shows that the top priorities for CEOs in Africa are attracting and retaining talent, the risks of doing business on the continent, and the strategies that CEO plan to implement in order to change and execute their businesses.

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